Wednesday, March 21, 2012
A transaction tax will always be profitable to avoid at a high enough level
Don't know how on earth they think they'll enforce this. The 5% SDLT on Â£1m+ is very rarely paid as Â£50k+ can get you a very good accountant. Â£140k+ will allow just about every Â£2m+ buyer to avoid it. Offshore companies can't be monitored for share ownership changes, so that's a non-starter. How you tell whether a domestic company is a 'wrapper' or not is going to be the subject of much litigation and wasteful collection expenses. Again, the government has not made this a tax on the amount over Â£2m, so there's a 'black hole' between Â£2m and Â£2.14m where no sales will occur, and of course at just above that level, cheaper avoidance measures are available. On a Â£2.05m spot, Â£50k are deemed as chattels and the SDLT is Â£100k instead of Â£143500.